China's Energy in Transition: Regional and Global Implications

Abstract

China is the largest energy user in Asia and the second largest in the world after the US. This paper documents substantial changes of the structure of China's energy use over the past decades. It explores the puzzling phenomena of China's low gross domestic product elasticity of energy consumption. Econometric analysis applying the AutoRegressive Integrated Moving Average model finds that factors such as institutional reforms and structural change can account for a substantial fraction of the downward impacts on the elasticity level. The paper also studies the future energy growth and energy security issues in China, and examines the regional and global impacts of China's rapidly growing energy consumption.

What Determines the DPRK’s Anthracite Exports to China?: Implications for the DPRK’s Economy

“…In some of these studies, it has been determined that the energy consumption per person or rate of increase in energy consumption compared to GDP will gradually decline as energy efficiency gradually increases. The findings of Kambara (1992), Garbaccio et al (1999) and Chu et al (2000) are all in good agreement with this conclusion.…”

Is the price elasticity of demand for coal in China increasing?

“…While there has been continued central influence over coal prices for the electricity sector, it is important to note that even government-influenced coal prices are affected by market movements: they rise when supply constraints are pressing, for example (Chu et al, 2006).…”

The Sleeping Giant Awakes: Projecting Global Implications of China's Energy Consumption

“…Several studies employ econometric methods to analyze the production and demand of the energy sector in China (Chu et al, 2006; Yuan et al, 2007). The analysis of Yuan et al (2007) employs cointegration theory to examine the causal relationship between electricity consumption and real GDP (gross domestic production) for China during 1978–2004.…”

“…Their results indicate that real GDP and electricity consumption for China are cointegrated with a unidirectional Granger causality running from electricity consumption to real GDP, but not vice versa. Chu et al (2006) apply the autoregressive integrated moving average model and find that the structure of energy use is changing in China. Coal is dominant, oil short, gas underutilized, and nuclear underdeveloped.…”